Homeowners with marginal credit can’t keep pace with the rising rates on flexible interest loans made at the height of the housing boom. An Assembly committee has passed legislation creating a pool of money to help them refinance. Is it a public bail-out of borrowers who should have known better--or protection for the rest of the economy? On Reporter’s Notebook, veteran Congresswoman Juanita Millender McDonald has died. We talk about her and the political landscape she’s left behind.

FROM THIS EPISODE

Homeowners with marginal credit can’t keep pace with the rising rates
on flexible interest loans made at the height of the housing boom. An
Assembly committee has passed legislation creating a pool of money to
help them refinance. Is it a public bail-out of borrowers who should
have known better--or protection for the rest of the economy? On
Reporter’s Notebook, veteran Congresswoman Juanita Millender McDonald
has died. We talk about her and the political landscape she’s left
behind.

The sub-prime lending market was a product of the housing boom that’s now cooling off in California and the rest the country. Many homeowners are now faced with foreclosure. They can’t keep up with increasing payments on loans with variable interest rates—which means they started out low and they’re now going up. Should California create a pool of money to help avoid those foreclosures? Democratic Assemblyman Ted Lieu proposes a bill. We hear from Lieu as well as from economist Jack Kyser.

Congresswoman Juanita Millender-McDonald served a district including Compton, Carson, much of Long Beach and parts of Los Angeles until she died of cancer on Sunday. In 1991, she became the first African American elected to the Carson City Council, and she served in the Assembly before going to Congress in 1996. Governor Schwarzenegger has the next two weeks to set a special election.Assemblyman Mervyn Dymally is one of those who predict a "major scramble" to replace
her.